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Corporate treasury: Leveraging technology to optimise risk management

Ritu Singh
Ritu Singh
Global Director for Sales Strategy for Corporate Treasury, LSEG

New corporate treasury risk capabilities from Refinitiv and Finmechanics leverage advanced technology to deliver a comprehensive treasury risk management solution.

  1. Refinitiv and Finmechanics have collaborated to develop a comprehensive, holistic corporate treasury risk management solution, Refinitiv Corporate Treasury Risk.
  2. Finmechanics brings advanced processes and technologies together with agility and integration expertise.
  3. Refinitiv and the London Stock Exchange Group (LSEG) bring world-class cross-asset data together with unrivalled infrastructure and security expertise.

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Today’s corporate treasury teams face an unprecedented array of challenges, from the impacts of global geo-political turmoil, rising inflation, supply chain dislocation, interest rate and FX market volatility, and more.

Against this backdrop, Refinitiv has partnered with Finmechanics, a leading provider of enterprise risk management systems, to launch an innovative and holistic corporate treasury risk solution – Refinitiv Corporate Treasury Risk.

What is Refinitiv Corporate Treasury Risk?

The new offering delivers augmented corporate treasury risk capabilities and offers targeted support optimised for corporate treasury teams.

The collaboration sees the advanced platform and expertise of Finmechanics incorporated into Refinitiv’s Eikon platform to create a new, cloud-based, cross-asset treasury and risk management service.

It is designed to identify, quantify, and manage cross-market risks – including those related to inflation, interest rate and FX volatility, credit and default, commodity pricing and input cost volatility. It also supports re-pricing under the new post-LIBOR Risk Free Rate (RFR) regime and maintaining hedge efficiency.

Leveraging Refinitiv’s cloud-based technology and the award-winning Finmechanics platform, the new software offers a specialist corporate treasury solution that supports the following capabilities for aggregated cross-asset portfolios:

  • Automated reporting, forecasting and analysis
  • Consistent real-time mark-to-market valuations
  • Cash-flow and liquidity forecasts to enable cashflow analysis
  • P/L, liquidity, risk projections and risk reporting
  • Scenario- and stress-testing
  • OTC derivatives pricing
  • Reporting capabilities at both group level and individual entity level

The combination of these capabilities, along with Refinitiv’s market-leading data and LSEG’s market infrastructure and security expertise, has created a powerful new set of tools to help corporate treasurers manage common pain points.

Refinitiv Corporate Treasury Risk
Refinitiv Corporate Treasury Risk allows you to stress test various outcomes through scenario analysis capabilities

Take control of treasury risk with Refinitiv Corporate Treasury Risk

What are the key challenges?

Corporate treasurers face a range of pain points and challenges. Many of these were exacerbated by the pandemic, which disrupted supply chains, and have been further intensified by ongoing market volatility.

Against a dynamic backdrop such as this, treasurers need to be able to stress-test their portfolios under different scenarios, such as substantially higher interest rates or significant currency fluctuations.

Some key pain points and related treasury needs include:

Cashflow challenges: Increased volatility and uncertainty means that firms now need more frequent, more accurate cashflow forecasts.

Managing liquidity exposure: Corporate treasurers need accurate, automated liquidity forecasts and hedging tools.

Protecting the corporate bottom line: Real-time data and automated analytics can offer immediate help to corporate treasurers, allowing them to quantify and manage P&L sensitivity.

Refinitiv Corporate Treasury Risk

Easily calculate pre-deal credit valuation adjustment (CVA) figures with Refinitiv Corporate Treasury Risk

Delivering targeted help

Through the collaboration with Finmechanics, Eikon now features post-trade analytics services for treasurers to price any financial derivative instrument and carry out precise and consistent valuations and reconciliations of all transactions and portfolios.

Regardless of the underlying asset class or floating rates, the system records cash flows and balances – across geographies and asset classes – and reduces the risk that can be introduced by data errors, mispricing and discrepancies commonly encountered in spreadsheets.

Philippe Carrel, Chief Commercial Officer at Finmechanics, says: “Corporate treasurers today operate against a backdrop of elevated risk, and face a range of challenges. Refinitiv Corporate Treasury Risk addresses these challenges, mitigates risk and offers confidence in an uncertain world.”

Refinitiv Corporate Treasury Risk
Generate on-demand cash flow reports for your portfolio of deals

The new solution is flexible and modular and can be scaled to suit individual business needs. Designed to deliver both speed and accuracy, the solution supports compliance-related activities including:

  • Hedge effectiveness
  • Pre-deal and portfolio CVA and DVA
  • LIBOR transition

Andrew Hollins, Director of FX and Corporate Treasury Desktop at LSEG says: “With the combined expertise of LSEG, Refinitiv and Finmechanics, corporate treasury clients can now benefit from tailored support and a cost-effective risk management solution that delivers transparency and agility, and is powered by Refinitiv’s trusted, quality pricing and market data to enable better decision-making in the face of today’s elevated risk levels.”

Take control of treasury risk with Refinitiv Corporate Treasury Risk